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Monday, April 19, 2010

Monday Challenge Project Summary: April 19, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $828.30
Trading "Sister" Balance: $1,741.40
Interest Bearing "Sister" Balance: $400.30
Total Challenge Project Funds: $2,970.00

The original video explanation of the Challenge Project that began with $500, is to be found here. The Challenge Project is basically a demonstration of a model that anyone could at least follow along with on a weekly basis. It is my attempt without cost, to help out the 'little guy' when it comes to investing and trading by providing an example, a 'model' as it were ... as run by myself as a professional trader with real money, in sub-accounts that I own; following my own three sisters portfolio management system; albeit modified a bit to operate with low funds. From time to time, I provide snapshots of the broker statements.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. Some time ago I stated that I may split up Rule No. 2, into weekly segments; or $25.00 a week.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project TRADING Account.

With this last application of rule number two, we've increased the capital in the trading account 9.729 % this year.

Now as I mentioned in the "Week in Review" podcast, I did have a loss in the Challenge trading account. It was a heartbreaking loss as well. I allowed myself to get whipsawed out of the Gold short early, and the trade then became immensely profitable. This trade is interesting, because I lost such a small amount of money, due to the way that I played the risk. For the Challenge Accounts, this means that I literally lost less than the $25.00 contribution last week.

I used options in that trade, and when it started to move against me, I sold out of the position, thus only losing what would translate into $35.00 to $70.00 loss for larger accounts, and only a loss of $14 for the Challenge Project trading account including commissions.

Here are the new balances for each of the Challenge Project ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $830.59
(YTD the account is up +3.937% YTD. Return is about +2.659% Yield is approximately +9.41% in dividends and additional shares of stock)
  • 5.1665 shares of KO (DRIP on for 4.1665 shares)
  • 3.1014 shares of JNJ (DRIP on)
  • 2 shares of MCD (DRIP is now OFF)
  • Cash: $205.05
-$5.10 of this cash I reserve to D.C.A. KO
-$64.00 of this cash I reserve to D.C.A. JNJ
-$84.00 of this cash I reserve to D.C.A. MCD

-This leaves $51.95 cash available
  • Additional $100.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,751.47
(YTD cash contributions, equity and return up about 9.729 %)
  • 2% risk tolerance gives us $35.03 at risk levels
  • 3% risk tolerance gives us $52.54 at risk levels
  • Additional $100.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $400.30
(YTD cash equity up about 99.85 % Return on Capital is 0 %)
  • $100.00 for a Slush fund / Drawdown Kill Switch fund
  • $200.30 for a Base Savings
  • $100.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $2,982.36

Total Challenge Account Growth Since Inception:
(Can Be Enlarged)

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.


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